Austrian Chancellor Nehammer announces his resignation after negotiations on the formation of a new government fail

VIENNA — Austrian Chancellor Karl Nehammer announced Saturday that he would resign in the coming days after negotiations on the formation of a new government failed.

The announcement comes after the People’s Party and the Social Democrats continued coalition negotiations on Saturday, a day after the surprise withdrawal of the liberal Neos party from the discussions.

“Unfortunately, I have to tell you today that the negotiations are over and the People’s Party will not continue them,” Nehammer, of the conservative People’s Party, said in a statement on social media.

He said “destructive forces” within the Social Democratic Party have “taken over” and that the People’s Party will not adhere to a program it sees as contrary to economic competitiveness.

Social Democratic leader Andreas Babler regretted the People’s Party’s decision to end the negotiations. “This is not a good decision for our country,” he said.

Babler said one of the main stumbling blocks was how to fix the “record deficit” left by the previous government.

“I proposed to Karl Nehammer and the People’s Party to continue negotiations and I called on them not to give up,” he told journalists on Saturday evening.

The next Austrian government will face the challenge of having to save between 18 and 24 billion euros, according to the European Commission. Furthermore, Austria has been in recession for two years, experiencing rising unemployment and its budget deficit currently stands at 3.7% of gross domestic product, above the 3% limit set by the EU.

Babler blamed the failure of the negotiations on “forces within the People’s Party” that opposed a coalition with the Social Democrats, while praising Nehammer for his willingness to compromise.

It was not immediately clear what would happen next.

The SVP will have to look for a replacement for Nehammer, who has always ruled out the possibility of a coalition with far-right leader Herbert Kickl. But Nehammer’s expected resignation could now prompt the party to rethink its options under new leadership.

The People’s Party and the far-right Freedom Party are close on economic policy as well as other issues such as migration and already work together in four coalitions at the local level.

Early elections would be another option.

Negotiations have dragged on since the Austrian president tasked the conservative chancellor in October with forming a new government. The demand comes after all other parties refused to work with the leader of the far-right Freedom Party, which won a national election for the first time in September with 29.2% of the vote.